The FCA is proposing to introduce a 'signposting rule' to provide consumers with details of insurance firms that have the appetite and capacity to cover consumers with complex medical histories who may have been declined cover, underwritten with an exclusion or had their premium loaded.
The Financial Conduct Authority (FCA) said it would be working with stakeholders as part of a consultation, closing 15 September, on how to produce relevant guidance materials for consumers taking out travel insurance.
Liz Foster, managing director of the Chartered Insurance Institute's (CII) Society of Insurance Broking, welcomed the proposals. "We agree with the FCA's decision to introduce a requirement to signpost," she said. "We believe the duty to offer signposting is already implied by the requirement in the Insurance Distribution Directive (IDD) for anyone selling insurance to ‘act in the best interests of their customers'.
"We also agree with the FCA's focus on a high quality of communication during the screening process, and on being clear to clients about how their condition is taken into account when making decisions about setting premiums and offering cover."
Foster pointed to the Society of Insurance Broking's good practice guide on pre-existing medical conditions, which was published in January this year, which addressed these issues. "We will be updating our guidance for professionals as this process continues," she added. "We would also urge the FCA to build on existing good practice as it develops its new signposting service."
While appreciating the value of signposting, Association of British Insurers director of regulation Hugh Savill argued the regulator would need to be more targeted in order to ensure a proportionate approach.
"The FCA's proposals would sweep up every single medical condition, however slight its impact on a premium," he said. "Travellers need a more proportionate approach, which avoids confusion and disruption to the customer journey. As the FCA themselves say, ‘further shopping around will not always help'. We will be urging the regulator to establish a more targeted approach to help those who could genuinely benefit."
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